LAW DECODED

Giving Loans and making Investment is quite common in big companies because there is always a tendency of routing of funds from one entity to another. Therefore, knowing proper compliances is inevitable, else your company can be caught up by the regulator. Here is a brief process you must follow while giving a loan or making the investment:

If there is an audit committee, then first the audit committee shall consider the appointment of the auditor and recommend the same to the Board.

MEANING: Private placement of securities is one of the modes to raise funds. The term 'private placement' means any offer of securities or invitation to subscribe (purchase) securities to a selected group of persons by a company. The offer or invitation to subscribe securities on a private placement basis can not be made to more than 200 persons (excluding QIB and employees) in a  financial year . It was decided in  Sahara India Real Estate Corpn. V .SEBI [2012]  that if an unlisted company made an offer of shares or debentures to more than the threshold limit of 200, it is mandatory for the company to follow 'public offer' norms and SEBI has proper jurisdiction over such issue. PRE-ISSUE COMPLIANCE : If it is an unlisted company, then make sure the entire holding of securities of its promoters, directors, KMP has been dematerialized. [ September 10, 2018 MCA Notification] Make sure proposed issue must be as per Article of Association ( AOA ) Authorized Capital

COMPANY INCORPORATION REGISTRATION OF PRIVATE LIMITED COMPANY CHANGE OF NAME OF COMPANY FUNDS RAISING/ISSUE OF SECURITIES PRIVATE PLACEMENT OF SECURITIES AUDITOR APPOINTMENT OF AUDITORS LOAN & INVESTMENT LOAN & INVESTMENT BY COMPANY REMUNERATION MANAGERIAL REMUNERATION IN CASE OF INADEQUATE PROFIT OR LOSS

1. Hold board meeting to consider a new name and pass a resolution to apply for reservation of new name. 2. File an application through "RUN" on MCA Portal for reservation of name. Once an application is approved, then the new name is available for a period of 60 days from the date of approval. 3. Hold Extra-Ordinary Meeting (EGM)to pass a special resolution subject to the approval of Central Government. 4. File an application in Form No. INC.24 for change in name. 5. File a copy of a special resolution together with explanatory statement and Central Government approval in Form MGT.14 6. The ROC issue a new certificate of incorporation in Form INC.25 Note: Such change in name shall be noted in every copy of MOA

Most of time a situation may arise when company does not have enough profit but still company needs to pay its KMP a hefty amount to retain the talent in the company. Therefore, it is important to know what compliances are needed to be done to pay managerial remuneration in case of no profits. PROCEDURE: Hold a meeting of the Nomination and Remuneration Committee (NRC) to discuss the salary. Then, hold a meeting of the Board to consider the recommendation of NRC and pass the resolution Hold EGM to pass the special resolution for the proposed salary. Instead of holding EGM, this approval can be taken through postal ballot also [where a member is more than 200] Then again hold a Board Meeting to execute the shareholder approval Since it is a special resolution, so file the copy of same with ROC in Form MGT-14

1 . Now an application for reservation of Name can be filed by using web service SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32). 2.  After getting the name approved, file  [1] form SPICe+ :  INC-32(Incorporation application). Once the SPICe+ is filled, the same then would have to be converted into pdf format, with just click of a mouse button, for affixing DSC. ATTACHMENTS : 1. MOA and AOA, only in case of Section 8 companies or, any of the first subscribers are based outside India or total subscribers are more than SEVEN. 2.Registered office address proof (Electricity Bill Copy | Telephone Bill), Rent agreement, NOC from the landlord. 3. Copy of Certificate of Incorporation in case subscriber to The proposed company is Foreign Body Corporate. 4. Shareholders Id proof:  Voter Id | PAN card | Adhar Copy 5. Shareholders Address proof: e.g.  Bank Statement (Not older than 2 months) 6. Directors Id proof. 7. Dir